Your CIBIL score plays a crucial role when you apply for loans and credit cards. Financial institutes and lenders rely heavily on this score when evaluating your creditworthiness, and this is the main reason you need to stay informed and in control of your financial health by regularly reviewing your credit report and free CIBIL score and report.
Furthermore, monitoring your credit health allows you to learn how to improve it further and be prepared for any potential future fluctuations.
In this post, we will dive into the advantages of regularly reviewing your credit report for a secure financial future.
Benefits of Checking Your CIBIL Score Online
Here are some benefits of checking your CIBIL score online:
It Offers Awareness of Creditworthiness
Checking your CIBIL score online provides awareness of your creditworthiness. It reflects your credit history’s health, influencing lenders’ decisions when you apply for loans or credit cards.
Here are different credit score ranges and their corresponding categories:
|Credit Score Range||Credit Score Category|
|800 – 900||Excellent|
|700 – 799||Good|
|600 – 699||Fair|
|500 – 599||Poor|
|300 – 499||Very Poor|
A high score indicates good creditworthiness, increasing the likelihood of approval and potentially securing better credit terms.
Understanding your CIBIL score helps you take control of your financial situation, maintain responsible credit behaviour, and plan for a secure financial future.
Helps in Loan and Credit Card Approvals
Checking your CIBIL score online is crucial as lenders heavily depend on it to assess your creditworthiness when you apply for loans or credit cards.
In this regard, a high CIBIL score increases the likelihood of approval and enables you to negotiate better terms and interest rates. It also reflects responsible credit behaviour, indicating to lenders that you are a low-risk borrower and making them more willing to extend credit to you.
It Helps You Identify Credit Report Errors
When you apply for a loan or credit card, the bank shares your personal and credit product details with the credit bureau. Errors in this information, such as misspellings, false defaults, or unauthorised accounts, can damage your credit score.
Consequently, regularly checking your credit report lets you spot such mistakes quickly and raise disputes with the bureau or financial institution for corrections.
It Assists You in Avoiding Identity Theft
Monthly credit report reviews help identify any unauthorised hard inquiries or fraudulently acquired loans/credit cards in your name. Promptly reporting such incidents to the credit bureau, financial institutions, and authorities allows for corrective action, mitigating the impact of identity theft.
In this regard, vigilance and timely reporting are essential in safeguarding against identity-related financial fraud.
It Helps you Keep Track of the Amount of Cash Being Used
Credit cards can be tempting, but potential lenders view high credit utilisation (above 30%) as a sign of credit dependency- this can hinder future approvals.
Requesting a credit limit increase is an option, but consistently maintaining a low ratio is more effective in showcasing responsible credit behaviour to lenders. So instead of maxing out your credit limit, regularly review your credit report and aim to keep the utilisation low.
It Helps in Financial Planning and Budgeting
Regularly checking your CIBIL score online encourages responsible financial behaviour. It helps you plan and manage your finances effectively, ensuring you meet credit obligations on time.
Monitoring your score also helps you maintain a good credit profile, which can boost your borrowing power. This practice promotes better budgeting habits, as you prioritise paying bills punctually and reducing outstanding debts.
It Helps You Get Better Interest Rates
To secure the lowest interest rate on a loan, being a good borrower with a high credit score is crucial.
By demonstrating responsible financial habits and maintaining a strong credit score, you position yourself as a desirable borrower. It not only increases your chances of loan approval but also allows you to secure loans with the most favourable terms and lowest interest rates available in the market.
When Should You Check Your Credit Report?
Check your credit report in the following cases:
- Every 2-3 months for thorough insight
- At least once a year, if you want to check it less frequently
- Before applying for a major loan or credit card
- After resolving credit issues or disputes
- To detect and prevent identity theft
- To monitor for accuracy and maintain credit health
Accessing your CIBIL score online offers numerous benefits, especially when it is available for free. By checking your credit score and report regularly, you gain valuable insights into your creditworthiness and financial health.
Moreover, understanding your standing as a borrower empowers you to take proactive steps to improve or maintain a good credit score, leading to better interest rates and enhanced financial opportunities. So make sure you keep track of your credit profile thoroughly to make informed decisions in the long run.